25-860 Davis v. Odn I Gmbh

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 21st day of November, two thousand twenty-five.

PRESENT: PIERRE N. LEVAL, BARRINGTON D. PARKER, RICHARD J. SULLIVAN, Circuit Judges. ______________________________________

EUGENE DAVIS,

Plaintiff-Appellant,

v. No. 25-860

ODN I GMBH, ODEBRECHT DRILLING NORBE SIX GMBH, ODN TAY IV GMBH, ODEBRECHT DRILLING NORBE EIGHT GMBH, ODEBRECHT DRILLING NORBE NINE GMBH, ODEBRECHT OFFSHORE DRILLING FINANCE LIMITED, ODEBRECHT DRILLING NORBE VIII IX LTD, OCYAN SA, f.k.a. ODEBRECHT OLEO E GAS S.A., DRILLCO HOLDING LUX S.A., FORESEA HOLDING SA, CONTRARIAN CAPITAL MANAGEMENT, LLC, JOSHUA WEISSER,

Defendants-Appellees. _______________________________________

For Plaintiff-Appellant: MARK N. PARRY (Zaid Shukri on the brief), Moses & Singer LLP, New York, NY.

For Defendants- Appellees Contrarian Capital Management, LLC and Joshua Weisser: JUSTIN M. ELLIS (Joshua D. Bloom on the brief), MoloLamken LLP, New York, NY. For all other Defendants- Appellees: ELLIOT MOSKOWITZ, Davis Polk & Wardwell LLP, New York, NY.

Appeal from a judgment of the United States District Court for the Southern

District of New York (Margaret M. Garnett, Judge).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the March 31, 2025 judgment of the district

court is AFFIRMED.

Eugene Davis appeals from a judgment dismissing his claims for breach of

the duty of good faith and fair dealing, tortious interference with contract, and

breach of contract against various defendants related to the debt restructuring of

2 a Brazilian oil and gas conglomerate and its affiliated entities. We assume the

parties’ familiarity with the underlying facts, procedural history, and issues on

appeal, but we provide a brief summary of the parties and claims in light of the

sheer number of defendants and the complicated nature of the transactions

underlying this dispute.

I. Background

In 2017, various entities affiliated with the Brazilian energy company

Odebrecht (together, the “OOG Defendants”) 1 issued two tranches of secured

notes under two indentures. J. App’x at 15, 51, 230. Those indentures gave the

beneficial holders of the notes (the “Noteholders”) the power “to appoint a

Creditor Representative to represent their interests.” Sp. App’x at 2; J. App’x at

127, 308. Exercising that right, the Noteholders appointed Davis to serve as

Creditor Representative, and on December 22, 2017, Davis entered into an

engagement letter with the OOG Defendants. J. App’x at 40–42. The

engagement letter, which is governed by New York Law, provided Davis with

1 The OOG Defendants include ODN I GmbH, Odebrecht Drilling Norbe Six GmbH; ODN Tay IV GmbH; Odebrecht Drilling Norbe Eight GmbH; Odebrecht Drilling Norbe Nine GmbH; Odebrecht Offshore Drilling Finance Limited; Odebrecht Drilling Norbe VIII/IX Ltd.; Ocyan S.A. f/k/a Odebrecht Oleo e Gas S.A.; and their successors, DrillCo Holding Lux S.A., and Foresea Holding S.A.

3 periodic payments and reimbursement of certain expenses “unless or until

[Davis’s] resignation or removal becomes effective.” Davis v. Odn I Gmbh, 24-cv-

1463,

, at *2 (S.D.N.Y. Mar. 31, 2025) (quoting J. App’x at 34). In

addition to monthly fees, the engagement letter also provided Davis with a bonus

payment due upon a “Principal Reduction,” defined by the letter as a reduction to

the outstanding principal amounts owed under the Tranche 2 notes. J. App’x at

34–35. The engagement letter incorporated the Indentures’s provision that Davis

could be removed as Creditor Representative “at any time,” id. at 129, 310, by

Noteholders with at least 50% “of the aggregate outstanding principal amount of

Tranche 1 notes,” Sp. App’x at 3; see also J. App’x at 34 (“This Agreement, and the

appointment of the Creditor Representative, . . . shall remain effective until the

removal or resignation of the Creditor Representative, in accordance with the

Indentures.”).

In September 2021, a majority of the Noteholders exercised their right to

remove Davis as Creditor Representative. Nearly two years later, “a Principal

Reduction occurred” due to a debt restructuring. J. App’x at 19, 23; Davis,

, at *2. In light of the Principal Reduction, Davis demanded payment

of his bonus and reimbursement for various expenses incurred after his

4 termination. J. App’x at 20–22. When the OOG Defendants refused, he

commenced this action in the Southern District of New York, seeking damages for

breach of contract relating to the bonus payment, breach of the covenant of good

faith and fair dealing, and breach of contract for the reimbursable expenses

incurred after his termination against the OOG Defendants. See id. at 16, 23, 25.

Davis also brought a tortious interference with contract claim against Contrarian

Capital Management, LLC (“Contrarian”) and Joshua Weisser (together with

Contrarian, the “Investor Defendants”), who were some, but not a majority, of the

Noteholders. In essence, Davis alleged the Investor Defendants initially

threatened him and later caused the OOG Defendants to remove him as Creditor

Representative to prevent him from receiving the bonus he would have earned for

the Principal Reduction. The district court dismissed all of Davis’s claims. Davis

timely appealed, but challenges only the dismissal of his claims for breach of the

covenant of good faith and fair dealing, tortious interference with contract, and

breach of contract relating to the reimbursement of expenses.

II. Standard of Review

We review de novo a district court’s dismissal of a complaint under Rule

12(b)(6), “accepting the allegations in the complaint as true and drawing all

5 reasonable inferences in favor of the plaintiff.” Palmer v. Amazon.com, Inc.,

(2d Cir. 2022). And under this standard, we are free to “affirm on

any basis supported by the record.” Coulter v. Morgan Stanley & Co. Inc.,

(2d Cir. 2014). To survive a motion to dismiss, a plaintiff must plead

“enough facts to state a claim to relief that is plausible on its face,” Bell Atl. Corp.

v. Twombly,

(2007), which would “allow[] the court to draw the

reasonable inference that the defendant is liable for the misconduct alleged[,]”

Ashcroft v. Iqbal,

(2009).

III. Discussion

A. Breach of the Duty of Good Faith and Fair Dealing

We affirm the district court’s dismissal of Davis’s claim against the OOG

Defendants for breach of the duty of good faith and fair dealing, but for a reason

different from those set forth in the order on appeal: namely, that Davis failed to

state a claim under Federal Rule of Civil Procedure 12(b)(6). Although Davis

alleges that his “termination as Creditor Representative was in breach of the OOG

Defendants’ collective duty of good faith and fair dealing[,]” J. App’x at 23, both

the engagement letter and Indentures make clear that Davis could be removed “at

any time” as Creditor Representative by a majority of the Noteholders,

at 129

6 (2021 Indenture), 310 (2022 Indenture); see also id. at 34 (engagement letter

incorporating terms of indenture). The OOG Defendants thus had no obligation

to dissuade or defy the Noteholders when they opted to remove Davis as Creditor

Representative. See id. at 23. On this point, New York law is clear: we may not,

under the guise of the duty of good faith and fair dealing, “impose an obligation

that is inconsistent with express contractual terms.” In Touch Concepts, Inc. v.

Cellco P’ship,

(2d Cir. 2015); see also Murphy v. Am. Home Prods.

Corp.,

(1983) (“The parties may by express agreement limit or

restrict the employer’s right of discharge, but to imply such a limitation from the

existence of an unrestricted right would be internally inconsistent.”).

We therefore conclude that Davis failed to state a claim for breach of the

duty of good faith and fair dealing.

B. Tortious Interference with Contract

Davis also challenges the district court’s dismissal of his claim for tortious

interference with contract against the Investor Defendants for allegedly inducing

the OOG Defendants to terminate him without paying the incentive fee. J. App’x

7 at 25–26. 2 Again, we are not persuaded.

“Under New York law, the elements of tortious interference with contract

are (1) the existence of a valid contract between the plaintiff and a third party;

(2) the defendant’s knowledge of the contract; (3) the defendant’s intentional

procurement of the third[]party’s breach of the contract without justification;

(4) actual breach of the contract; and (5) damages resulting therefrom.” Kirch v.

Liberty Media Corp.,

, 401 (2d Cir. 2006) (internal quotation marks

omitted). But as the district court correctly concluded, Davis failed to allege an

actual breach of the engagement letter, which expressly permitted the Noteholders

to terminate Davis at any time and further provided that Davis would not be

entitled to an incentive fee for a post-termination Principal Reduction. Sp. App’x

at 6; see also Jack L. Inselman & Co., Inc. v. FNB Fin. Co.,

(1977) (“In order for the plaintiff to have a cause of action for tortious interference

of contract, it is axiomatic that there must be a breach of that contract by the other

party . . . .”). Davis’s failure to allege, much less plausibly show, an “actual breach

of the contract” thus dooms his claim. Kirch, 449 F.3d at 401; J. App’x at 25–26.

We therefore see no error in the district court’s dismissal of this claim.

2 Initially, Davis brought two claims for tortious interference, but Davis does not appeal the dismissal of the claim asserted in Count Three of the amended complaint. See Davis Br. at 42.

8 C. Breach of Contract for Reimbursable Expenses

Finally, Davis claims that the district court improperly dismissed his claims

for breach of contract against the OOG Defendants for failing to reimburse him for

“fees and expenses, including attorneys’ fees, incurred by Davis” in 2023 and 2024.

J. App’x at 21–22. But this claim is squarely foreclosed by the engagement letter’s

express terms, which provide that the whole agreement terminated upon Davis’s

removal as Creditor Representative. See id. at 34 (providing that “[t]his

Agreement . . . shall remain effective until the removal or resignation of the

Creditor Representative”). Although it is true that other provisions of the

engagement letter included a survival clause, see Davis,

, at *4

(citing sections eight, nine, and ten of the engagement letter), section five – which

deals with expenses and reimbursements – contains no such survival language.

J. App’x at 35. Because the parties to the contract clearly understood how to

create a survival clause when they deemed it appropriate, it is not for us to rewrite

section five to include such a provision nearly eight years after the contract was

executed. See Georgitsi Realty, LLC v. Penn-Star Ins. Co.,

(2d Cir.

2012) (“[C]ourt[s] ‘may not write into a contract conditions the parties did not

insert by adding or excising terms under the guise of construction, nor may it

9 construe the language in such a way as would distort the contract’s apparent

meaning.’” (quoting In re Matco-Norca, Inc.,

(2d Dep’t 2005)));

see also Brown v. Health Care & Ret. Corp. of Am.,

, 92–93 (2d Cir. 1994)

(concluding that “the parties intended to draw a distinction” where one provision

of a contract contained and another provision omitted certain defined terms). We

therefore agree with the district court that Davis failed to state a claim for breach

of contract as to the reimbursement of expenses.

* * *

We have considered Davis’s remaining arguments and find them to be

without merit. Accordingly, we AFFIRM the judgment of the district court.

FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Court

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